Wealth Tax

On September 17^th the RD Law 13/2011, of September 16^th, which temporarily resets the Wealth Tax.

 This regulatory change will have the practical impact that the regions decide, using its normative capacity. As you know, territorial parliaments can decide on fundamental issues of the tax such as the minimum exempt, tax rates, deductions and credits. However, it appears that those who have the obligation to contribute will be fully affected by this change regardless of the regional legislations.

The temporary reestablishment of Capital Gains Tax is done through the following amendments to the Law 19/1991:

ü  The exemption of the value of the taxpayer’s residence, which up to 2007 was 150.253,03 euros, will be 300.000 euros. It should be remembered that this amount is for each taxpayer and therefore a marriage who own a joint property will not be taxed if the value does not exceed 600.000 euros.

ü  Recovered in this tribute is the obligation of non-resident taxpayers to name a representative relating to these obligations through a permanent establishment or, due to the amount and characteristic of the personal assets, it is required by the Tax Administration. In addition, the depositary or manager of the assets of a non resident is jointly and severally liable for the payments of the Tax corresponding to the assets or rights that are deposited or managed.

ü  A minimum exempt is established of 700.000 euros (which reduces the tax base to reach the payable) where as before it amounted to 108.182,18 euros. However, the region, as mentioned, may set another.

ü  Contrary to what happened in 2007, the exempt minimum is also applied to taxpayers who tribute by real obligation.

ü  The 75% bonus on the quota of assets and rights located or to be carried in Ceuta and Melilla is being re-established.

ü  The obligation of taxpayers to declare with a payable quota, or in any case, when the value of the assets and rights is greater than 2.000.000 euros has been re-established (before it was if the amount exceeded 601.012 euros). As is the norm, it seems, even if a region raises the exempt minimum or fully bonuses the quota, the taxpayers with properties and rights valued at more than 2.000.000 euros should submit the declaration.

ü  The tax returns to be fully discounted and eliminates the obligation to declare in the year 2013.